Judy Graff's sublime-to-the-ridiculous (well, mostly ridiculous) take on real estate for east San Fernando Valley and North Los Angeles communities. This includes Hollywood Hills, Burbank, Studio City and Toluca Lake real estate and homes for sale, and also covers Valley Village, North Hollywood, Glendale, Atwater, Sherman Oaks and other L.A. areas too. General news and musings as well.

Monday, September 27, 2010

John Mulkey, The Housing Guru, has many years of experience in the home building industry. Here's his take on our next year:

Perhaps I should be pleased that my predictions for 2010 proved more accurate than many of the so-called experts, but gloating has little appeal when most of the country continues to suffer the effects of the worst recession in decades. And although those same “experts” have announced that the recession ended more than a year ago, that seems little consolation to the millions of unemployed or millions more who have lost their homes. These are indeed troubling times, and our troubles are far from over. But since this is a longer post than last year, I’ll jump right in.

Interest rates: There are no surprises. Interest rates will remain low throughout 2011, with mortgages probably remaining close to 5% and 10 year Treasuries around 3.5%. The government/Fed will continue to keep rates at near historic rates, for doing otherwise would put the brakes on an economy that is stuck in first gear. Inflation still seems a possibility, but at this point, only a distant one.

Home prices: While many had predicted home prices to stabilize by the end of 2009, that didn’t happen. Through July of this year, prices have declined another 3.3% year over year. There has been no stabilization. Although home prices are down about 35% from the peak, they’re still about 10-15% above the trend line of the past 100 years. In addition, there’s still an incredible overhang of potential foreclosures and short-sales, and the market must absorb those before we achieve stabilization.

In 2009, the “cure rate” for delinquent mortgages fell off a cliff, and if anything, that trend has only worsened. Only a small fraction of loans in default are self-curing today, providing a “shadow inventory” of up to 7 million homes. Prices will remain under pressure until those homes are absorbed. And, adjusted for inflation, home prices will NEVER recoup the losses of the past 3 years.

Foreclosures and short-sales: Distress sales, now at the highest rate since the beginning of the recession, will remain a huge portion of home sales, hovering near 35-40% throughout 2011 and comprising as much as one-third of sales in 2012.

A new concern for some is the possibility that the government is considering allowing the housing market to collapse, especially since none of their efforts to salvage it have been successful. While I don’t think that will happen in the near-term—prices would fall dramatically, endangering both banking and the overall economy—I do expect to see a prolonged effort to withdraw government support from the housing and mortgage markets. Loss of government support will ultimately make homes more expensive and more difficult to finance—but that’s a 3-5 year scenario.

Housing Tax Credit: While there has been some mention of extending another Homebuyer Tax Credit, the administration seems to have little appetite and no funds for doing so. With no support from NAR or NAHB, and with only marginal results from previous credits, it seems unlikely that we’ll see another in 2011.

Employment: The key to a sustainable recovery is the creation of millions of new jobs, and that’s just not going to happen this year or the next. Unemployment throughout 2011 should remain above 9%. With 20 million currently unemployed, underemployed, or out of work self-employed, some are now resigned to the prospect of never working again. Millions of jobs have been lost forever, and the economy will have to remake itself in order to employ all those who need/desire employment. Creating new job opportunities in new industries will take years, resulting in prolonged uncertainty in an economy whose lifeblood is consumer confidence and spending.

New Construction: The current recovery has seen the slowest rebound in residential construction in more than fifty years; and with the administration publicly pushing affordable rentals over the concept of home ownership, homebuilders will see little relief from Uncle Sam. Additionally, changing demographics, tightened lending restrictions, and a market exercising extreme caution, will cause some to remain renters for longer periods than we’ve seen in the past.

In my 2009 post I predicted an ugly mid-term election, and that seems to be coming to pass. Both political parties have sent out their “attack dogs” and are filling the airwaves with both distortions and impossible promises, yet neither has presented a viable plan for recovery. And that’s because there is none—at least none that will satisfy the American voter who demands instant improvement, yet who is unwilling to forgo any portion of their “entitlements.” And the prospects are even more dismal for the coming year, as both parties begin posturing for the presidential election and are carrying partisan politics to the extreme.

Finally, while the economy will continue to grow, it will do so at a rate insufficient to rapidly absorb the millions of unemployed or to stimulate growth in troubled sectors. Crippled by continued high unemployment and weak consumer confidence, the growth will be obscured by the dark clouds of uncertainty. And while some may feel my analysis too negative, the facts are what they are. Of course it is possible that some unforeseen action could inexplicably restore our economy—possible, but most unlikely.

(It could be worse) The above is contingent upon our avoiding other global catastrophes. Should there be any sort of mid-east conflict, a spike in oil prices, economic collapse in Europe, or a significant terrorist attack, all bets are off. And while we will probably avoid such calamities, in today’s world, little is certain.

Friday, September 24, 2010

We've reduced the price on 4552 Morse, Studio City to $639,000. It's definitely the nicest house in Studio City in the price range. Please visit JudyGraff.com for more pictures or to arrange a showing. With this new reduction plus low interest rates, yes, you can afford Studio City!

Wednesday, September 22, 2010

Forget Melrose and Silverlake. If you’re looking for vintage clothing and designer resale clothing, Burbank is the place to be. Magnolia Boulevard has finally become a seriously-great destination shopping experience with Magnolia Commons, the long-lived Hubba Hubba, always-busy It’s a Wrap, the formerly-in-Studio-City Playclothes (it’s like a museum inside!) and Unique Vintage. I’m sure I’m leaving some stores out, but since they’re all walking distance from each other, nobody should have a problem finding them.

If walking from store to store isn't your thing, please give online Vintage Friends a try. Local proprietor Melinda has some amazing things -- and if you tell her that I sent you, she'll give you a discount!

Thursday, September 16, 2010

This recently came up on a transaction: the misuse of sales data for comparable sales purposes. Here are the three numbers you start your comparison with, and these are the numbers the bank's appraisers use as well:
-- sales closest in time, preferably no older than three months;
-- sales closest in distance, preferably no farther away than 1/2 a mile;
-- sales closest in size. You cannot compare a 1,000 square foot home to a 2,000 square foot home. Ideally, the size difference should be no greater/lesser than 25%.
Yes, there are variables, including exact location, neighborhood, view, condition, lot size, etc. but these are the three fundamentals to start with. I'll elaborate in another post soon. And remember, exact price per square footage is only accurate if you're comparing condos in the same building with the same square footage, amenities, etc.

Sunday, September 12, 2010

This is a re-blog from the Activerain website, which is a Realtor network. Once again, Philip Faranda comes up with price reduction advice that is oh-so-succinct! I especially like his line, "The market has spoken."

Via J. Philip Faranda (J. Philip LLC) Westchester County NY:With a median home price hovering near $700,000, even a modest price reduction on a Westchester County home can be tens of thousands of dollars. I have to approach a reduction with the diplomacy of a funeral director but be as convincing as a physician imploring his patient to quit smoking.

No one could predict after the stimulus where prices would go, but it is clear that what few buyers we have are skimming the absolute cream off the top and leaving the rest. They even fight over the good stuff, creating an illusion of urgency in isolated precincts. Overall, sadly, median home price is an illusion; it is a metric of the value of those few, unique sought after homes that people watch even when they weren't on sale. They needed nothing. They were priced to the bone for their category.

Money lost in a price reduction was never your money. It was an illusion. It didn't exist. I find myself, more and more, explaining to mournful sellers that the $25,000 that went down the drain when they went from $624,900 to $599,900 was a paramour that never loved them. She never cared, Johnny. The baby wasn't yours. She wanted to close the Copa and make sure you never worked in this town again. For God's sake man pull yourself together, it was all an illusion.

You know, that sort of thing they cover day 2 in licensing class. Or not.
In 2005, 852 single family homes sold in Westchester County with a median price of $732,000.
In 2010, 424 single family homes sold in Westchester County with a median price of $715,000. 428 people got nothing.

The pool of able buyers has shrunken by an absurd amount. Millions of prospects have vanished due to either their own disasters or the new draconian lender underwriting guidelines. What few buyers remain are skeptical, drunk with options, terrified of making a mistake, have no confidence in the future, and are heavily invested in the group think notion that they must get a steal or they will be exposed to grave financial risk. You know, all those happy things perspective home buyers have always focused on.

Here's the reality: If you are multiple listed, staged well, tidy, and have been on the market for 60 or 90 days with no offers or few lookers, the market has spoken; you need to reduce your price. You aren't the McClotchkees down at the end of the cul de sac who sold in the first 30 days. They had something, or ten things, you don't have. And the only adjustment you can make to the buying public is price. A feature ad won't do it. A newspaper display ad won't get it done. Busting your agent's chops to chase down Gladys Pflarphlingston for feedback on a showing 2 weeks ago won't do it. If you are on the MLS, I can show you how many people have clicked on you online and clicked off every week since we listed. You aren't a secret. Quite the opposite: with public searches, serious prospects can tell me their opinion of your toothpaste.
If we are in showing condition with marketing and you aren't sold, the faster we address price the faster we'll sell. The money you are asking for is not on deposit in the bank of buyer opinion.

Thursday, September 09, 2010

4552 Morse Ave. in Studio City will be open on Sunday, Sept. 12, from 1:00 to 4:00 pm! This gorgeous 2 bed, 1 bath traditional is being offered for $659,000. More info and pics can be found on my website at JudyGraff.com. And there's more -- the motivated sellers will consider paying buyer nonrecurring closing costs. This could result in a cash savings to a buyer at escrow closing of $12,000 to $18,000!

Wednesday, September 08, 2010

I just spent a weekend in Palo Alto and San Francisco visiting my in-laws. Yes, everybody loves San Francisco with its big-city vibe and 20 kinds of olive oil, blah, blah blah, big vacation destination, etc. But really, I missed our land and think we have it all over the SF Bay Area. Here's why.

1. We have more homes for sale. Many more. (Had to get that search term in there, but it's true.)
2. We have Universal City and Disneyland. They have Pier 39. Please.
3. We have less traffic. Really.
4. They have Stanford. We have UCLA, USC and Makeup Art Designory.
5. There, everybody wears hoodies and looks like the Unibomber. We have Aloha shirts and fat kids in baggy, calf-length shorts. Way more cheerful!
6. We have more tattoos and piercings.
7. We have Zankou Chicken.
8. Many of us can see a Costco or Target from our houses. What can they see? The Golden Gate Bridge, maybe? Meh.
9. We have more parking. You can actually turn your car off close to your house here.
10. Housing costs less here.
11. We have more Armenians, and more of every other ethnic group, too. Except maybe Chinese.
12. We have the Lakers. (We'll leave the Dodgers v. Giants argument for another time.)
13. We have The Arclight(s).
14. They have upscale shopping in Union Square and Stanford Shopping Center. We have upscale AND downscale shopping everywhere.

So let's stop with the inferiority complex, folks, and learn to appreciate where we live!

Thursday, September 02, 2010

Here's a great article by L.A. Times' Meghan Daum. The title above should link; it's in today's paper if not. My note to Meghan is that if she thinks house pics are getting worse, she should see some of what I see when I visit these homes -- yuk!

Wednesday, September 01, 2010

This is a great post from colleague Stephen Munson regarding lockboxes. I especially like Stephen's timeline. And Westside agents, I know it's an additional expense, but please get a keypad if you'd like to show homes in the San Fernando Valley -- it will be SO much easier for you to show property there!

No Lock Box-No Show!I can't tell you how crazy it makes me trying to show properties in this market when there is no lock box on the home! In Los Angeles, The West Side is one of the last remain areas that has fallen waaay behind the times in their real estate practice of no-lock boxes. I can understand "high end" or "high profile" properties being an exception to having a lock box installed but please, don't you want to sell the house?
Today's lock boxes are so sophisticated that they track every agent that's been in the home. So if there's an issue, you can call that agent back.
Most of my business is in the San Fernando Valley and San Gabriel Valley so it's not a huge deal here. But I will tell you, if I have a buyer and we are looking at properties, the homes with no lock box are at the back of the line and often not seen. There's just too much too look at an not enough time trying to coordinate schedules with Listing agents and sellers.
I can show 6-7 properties within 2 hours in the valley vs. 2-3 properties in the same time frame on the West Side of LA!
I've asked the agents who refuse to put lock boxes on why they still practice this ancient "no-Lock box" protocol and they tell me they want to be there to "sell" the home. That in itself is almost as deadly as having the seller present at the showings (which happens a lot in these "no-Lock Box " listings). I'm not talking about you of course so don't worry!

Arguments FOR a Lock Box:

Make your home/listing as easy as possible to show. If it's easy for the agent, it's easy for that qualified buyer!

Often times buyer make only 1 or 2 rounds of showings, make sure yours in that first round!

Remember, most lock boxes are very sophisticated and will track all traffic in and out of the home.

Easy access is as important as the photos or description of your home.

I do understand the need for "appointments only" in the high end and high profile properties, but please, let's step in into the current decade, get with the program and sell your home/listing now!